Interview: Steve Keen – Why not? – Transcript

The Mint: Hi, Steve. Great to see you again. And thanks for giving us your time. I wanted to start first with you describing your experience in the moment of living in Thailand under COVID-19. How does life feel? Can you go out at all? Do you feel at risk? How is it?

Steve Keen: It is amazing, because it’s a bit like being a person who has almost drowned, you now really appreciate the air. Because when we first arrived over here, the reason for coming here was because I was apoplectic about what I was seeing happening in both the UK and the Netherlands and the explosion of COVID cases over there  and the situation we’re in of serious planetary overload, and with the breakdown of our biological systems to be soon followed by a breakdown of our economies.

I blame it on neoclassical economics. Not only, but they certainly are major contributors to it all. I’m probably the person doing the most to expose the garbage, absolute sheer unadulterated garbage that people like William Nordhaus and co. have done on climate. I thought, “I’m going to be damned if I get killed as collateral damage”. So that was the major motivation for moving to Thailand.

When we arrived, Thailand was actually number two behind China in the number of cases when this thing first broke out. But as time went on, the numbers were getting worse for the Netherlands and the UK, absolutely horrifically worse, already overtaking Thailand by that point. I thought, “We’ve got to get out of here and get somewhere where the virus is not growing as rapidly”. And that was either Thailand or Australia, which were the two choices I had. We arrived one day before they started closing the border to tourists.  We moved to a small county called Trang, which is about 800 kilometers, 500 miles South of Bangkok. At the time we arrived, there were four cases in Trang, the entire province. There are now seven. There hasn’t been a new case here in about six weeks to eight weeks. So, we know the virus is not here. We all do all the mask stuff and the sanitizing stuff anyway, but you have absolutely no tension now. No fear of your fellow human being. And that is, I’m sure, an absolute contrast what life was like for you in the UK.

The total number of cases in Thailand right now, I think, is 3070.  The daily increase in cases is below 10 and normally closer to one than it is to 10. And all those cases, bar one in the last two weeks, has come from people in quarantine, so Thai nationals returning home and being put in compulsory quarantine, none of this garbage about, you know, “lock yourself away and please catch the tube home if you feel like it”.

So, Thailand will probably declare itself virus free, I would say, in about a month’s time. The only reason not to declare themselves virus free is whether there are still Thai nationals returning home. So, this is one of the countries that absolutely killed the virus.

The Mint: Wow. So how come Thailand managed this? It seems to have done tons better than us.

Steve Keen: Several reasons for that. When I got here, I saw what the Thais were doing in terms of being prepared for this sort of thing. Every day, we were lining up outside a supermarket here to buy these packs. And one of these packs contains four masks. They are N-95 masks, so the standard that actually blocks the virus. And these costs the princely sum, for the whole pack, 10 baht. 10 baht is 25p. The whole idea of a shortage of personal protective equipment—forget it. Now, why have they got so many?  pardon? Can I use French in your show?  They fucking manufactured them themselves. And the manufacturer is actually making a 20% profit on those things. It’s a government-controlled distribution system. They can’t put more than that price on them, but they’re still making a 20% profit per mask, at that level. If you want to buy them in the UK, you can’t buy them, you’ve got to be important, we didn’t have manufacturing capacity.

So that was courtesy of us deindustrializing the West to take advantage of cheap wages in the Third World, which I think is what actually happened with so-called globalization, it was basically exploiting cheap labor. But the third world countries that are doing this are exploiting the stupidness of Western manufacturers, because they wanted Western technology in a hurry. Particularly China of course wanted that. So, there’s a huge technology transfer. They’ve got this manufacturing capability and they’re ready to use it and they can deploy it straight away. They can scale up and scale down as required. And so, there was no shortage of personal protection equipment over here or in China or in South Korea or in Taiwan, they all had the masks they needed. So that alone stops the transmission of the disease. Then they had experienced with SARS.  They controlled the SARS outbreak They weren’t stupid enough to imagine this was just the sort of thing that a bunch of nerds in medical schools talk about. This is a real experience they’ve already had at least once with SARS. So, they were prepared for it. They had a public health system, like at manufacturer, what they needed, and they’ve basically eliminated the virus.

The more you overreact, the more sensible you are. And this is the mistake that the UK made. If you relax and let an exponential process get going, within a short while it is a hundred or a thousand times worse than it was before you could have acted. So, you blew out to this enormous number of cases. And now you’re saying, well, it’s too late to track.

The country that went in hard and fast have knocked it out completely. It’s just taking an exponential process seriously. It’s just realizing how bad an exponential process can be and making policy decisions on that basis. Jacinta Ardern made a comment at one stage, there were, we have 12 cases, but there are 12 cases in Italy two weeks ago.

And so, she realized you had a stamp on it very, very rapidly. She had cooperation from New Zealanders who accepted the need for a lockdown, and they’ve basically eliminated the virus now. So, the main thing is taking the need to shut this down rapidly, seriously, and doing it as a public policy issue. That is number one.

Number two was then public compliance with what you’ve said. So, if you tell Americans that they’ve got to wear a mask or they’ll say, no, why should I wear a mask?

 The Mint: So, what is really interesting, it seems, is that the world has been divided into countries that move fast and quashed it and will have no virus, and also populations fairly unexposed to the virus. Whereas other countries like the UK, U S., probably India, will probably be living and coping with ongoing infections for a long time. So, what are the implications economically, do you think in politically due to that?

Steve Keen: Politics plays a large part in that it tends to be either progressive governments or authoritarian governments, which have done it, in the sense that most of South Asia and China, obviously you have an authoritarian government of some description. But those governments also are very responsive to what the public wants because the public tends to riot and demonstrate if they don’t get a decent standard of living out of those countries. So, Thailand you’d see, as a sort of authoritarian democratic country. But there were quite serious riots over the last couple of years, over political divisions, over wealth in the country. So, they will complain if the situation doesn’t work out well for the majority of the public. And frankly, that seems more responsive to what people actually want than the faux-democratic systems of America and the UK.

The Mint: Now that the world has been divided between the two spaces, one ongoingly infected and one space hardly affected at all, how do you think that’s going to affect globalization and international political relations?

Steve Keen: We have a really seriously divided world coming out of all this. And it’s never a division that we’ve had before e. The divisions we’ve had in terms of First World, Third World, the West and the East have all been relatively geographical. This is partly geographical to because it’s mainly countries in the Asia-Pacific region that have been successful, but Norway is also one of the countries that’s been successful.

So, it’s a very, very strange division of the world. I call it a fractured planet rather than a divided planet.

The Mint: Presumably for the countries having continuous disruption by the pandemic, that’ll affect their ability to economically. The US is obviously a huge provider of demand to the rest of the world, and that will be cut off or substantially reduced. Do you think that will mean that the ASEAN area, for instance, will really seek to ramp up local demand and change the nature of their economies?

Steve Keen: Very much so. Is this thing the end of globalization? I mean, globalization basically said it’s best to be a big globule of matter, no borders, free movement anywhere. And that’s basically saying to a virus, “Hey, come along and invade every last few men on the planet!”

It’s thinking in a whiteboard economic way, rather than a biological way. If you want it to be ready to fight virologic infections, you would never have had a globalized economy. You would have had regionalized.

So, an outbreak in one region would not affect another region, but instead we made it totally globalized, and that exposed us to a biological attack, which is what this is fundamentally. And the impact is so great, I think no country that manages to avoid the virus will ever consider going back to globalization once more. So, they’re going to say, “Okay, we can’t rely upon globalized demand or supply”.

The Mint: Isn’t there a slight difference between the movement of goods and services and the movement of people. Because, surely though, the spread virus was through people traveling, whereas goods don’t take the virus with them.

Steve Keen: I have yet to see a parcel sail itself to America. There are people on ships. You have to have sailors. You have to hop inside a confined space and spend three to five weeks traveling from one spot to another. They are going to have to be in quarantine for two to three weeks before they hop inside the boat, minimum, as a crew. They’ve got to be isolated from each other and isolated from their families. To be really serious about it, you’ll need a three-week complete quarantine before your crew hops on the boat. And of course, you’ve got to pay them for that quarantine period. The whole idea of ships of convenience, the flags of convenience that have reduced the cost of international shipping, that’s gone. The whole pattern of global trade is being disrupted by this. The costs of globalized trade, where we tend to ignore the cost of transporting goods and ignore the fact that there’s time delays and all that sort of stuff in there—the time delays are going to blow out by a factor of at least two to four weeks in each shipping. The costs are going to blow out, because you’re going to pay longer for the workers on board the boats. Even on a sheer cost of doing it at scale, it completely overturns the globalized production chain and says you’re better off doing a domestically.

I have a lot of respect for the child bureaucracy, and then certainly how they’ve handled the COVID has been superb. I’m sure that there are people inside the government now saying, “Well, we can’t rely upon American tourists? How do we increase tourism elsewhere? What other systems can I use? We can’t rely upon exporting stuff to America anymore.” So, they’ll be making a decision saying, “Well, we have to boost domestic demand. How do we do it?”

And I’ve got a feeling, in that sense, this is the  beginning of realizing what is an MMT [Modern Monetary Theory] approach initially, to create localized large demand while chucking out the, the nonsense idea about international trade that MMT has about exports being a cost and imports being a benefit. Exports and imports, I think, are gone in that sense. It’s going to be as much as possible domestic production and regional cooperation.

The Mint: What do you think that all means for climate change and COP26 next year?

Steve Keen: I hope that people realize the seriousness of global warming and climate change, courtesy of coronavirus, because this, to me, is a dress rehearsal. Of course, the Spanish flu was the classic example of a previous pandemic. Pandemics are made more likely by the pressure we’re putting on the planet as a species. And that pressure has increased manifold since the time of the Spanish flu.

We are going to see many, many more climate crises like this look at 2020, so far: Fires in Australia, floods in Australia as well, the virus, floods in India, and now locusts’ plagues and Africa and Asia. And we’re going to be following up with wildfires in California. It’s classic that it’s actually in 2020 that this happening, because we all talk about 2020 hindsight.

Seeing what we’re seeing in 2020, if we’d known this was coming in 2010, we would have behaved a damn sight differently. And I think, in that sense, it’s a wakeup call for all these sorts of meetings, but I still think it’s too early for any of those decision-making bodies to really change direction. They’re still going to be trying to achieve green growth, which I think is an oxymoron.

The Mint: I hope this message does get across and we see some new thinking in the recovery. Thank you very much, Steve, for joining us from Thailand. I look forward to talking to you again soon and seeing how policy really does change, maybe away from globalization. That will be fascinating.


Steve Keen

Professor Steve Keen is both critic of mainstream economics and a developer of a modern complex systems approach to economics. Best known for the book Debunking Economics, he was a …

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